The
gales of economic adversity howling through the nation and the world
will be brutal and prolonged. As the recession deepens and prolongs, it
will coincide with peak oil impacts. And as baby-boomers continue to
age, far fewer workers will support many more retirees. Increasing the
Social Security eligibility age is inevitable, and decreasing benefits
is likely. Healthcare costs, now at $8,000 for every man, woman, and
child, will increase to $13,000 within a decade.

When the storm
ultimately subsides, Americans will live differently. If our city's
leaders reform their foolish development policy, Somerville will be
better positioned than many places to benefit from these changes
because of the region in which we are located, our urban character, and
our particular characteristics.

Economic tumult has
transformed modes of living in the past. At the conclusion of the Civil
War, towns like Lawrence, Lowell, and Springfield were the nation's
industrial centers, while most Americans lived on farms or in farming
towns.

A mortgage-driven banking crisis in 1873 marked the
beginning of a depression that lasted over twenty years. By 1900,
innovations in industrial production were concentrating economic growth
in burgeoning factory cities across what we now call the rust belt.
Changes in how Americans lived were both a result and a cause of this
transformation.

Many left the farm, drawn away by factory
wages and the excitement of city life. They could not have done so
without productivity improvements that lowered food and clothing costs,
enabling them to afford city rents. These historic changes had a great
impact on Somerville, its emigrants with French Canadian roots, and its
immigrants from Italy.

In 1929, another banking crisis marked
the beginning of the Great Depression. It ended when World War II drove
an enormous expansion in industrial capacity and wages. The War's
conclusion brought suburban growth and economic demand driven by
production of the automobiles required to commute to, and the
appliances required to equip single-family suburban homes. Retail
establishments, then production facilities, then offices followed the
urban refugees. The suburbs' lure entranced many Somervillians whose
departure began to unravel the fabric of the city's extraordinary
community.

Past crises hastened economic trends already
underway. This one will accelerate the loss of manufacturing jobs that
globalization and less-than-fair trade have brought us over the past
several decades. Between December 2007 and November 2008, the
manufacturing, construction, extraction, and transport sectors shed 1.8
million jobs, while professional-occupation jobs increased by 500,000.

Future
job growth will come from the energy, education, healthcare, biotech,
entertainment, information, and research sectors. It will be driven by
innovation, which happens most in dense urban areas where diverse
professions and peoples interact. The world's 40 largest urban
concentrations produce 90% of its patented innovations.

Simply
being urban is not enough, however. Attracting a critical mass of
highly educated people is essential. There is no metropolitan area with
as dense a concentration of such workers as Greater Boston. And
Somerville, whose residents with college degrees grew from 16% to 40%
between 1980 and 2000, now has the second-densest concentration of
people with postgraduate degrees in Massachusetts.

There will be
population shifts within regions as well. The changing location of job
opportunities will add momentum to the move back to the cities already
motivated by increased fuel costs, commute times, reduced family sizes,
and the excitement, freedom, and amenities of urban life.

When
I first came to Somerville, housing was a bargain. Now, urban
residential neighborhood space across the nation and in Somerville is
priced between 40%-to-200% more than is suburban space. In most
metropolitan areas, only 5-to-10% of housing is located in walkable
urban places like ours. But the University of Michigan's Jonathan
Levine finds that one in three homeowners would now prefer to live in
these places.

The new economy will reduce homeownership as
well. Strong and urgent requirements to lower the federal debt, fund
healthcare, and invest in sectors with the greatest potential for
economic growth will obligate the federal government to reduce the
generous home-mortgage-interest income-tax deduction.

At the
personal level, the often-cited "American dream" has been about
economic opportunity and home ownership. Now these two ambitions are in
conflict. Americans can no longer finance their over-consuming
lifestyles with easy credit. The combination of housing and
transportation costs is accounting for 50% or more of many families'
budgets. They are draining money away from expenditures, such as
education, that are necessary to pursue economic opportunity.

About
two-thirds of U.S. families own their homes. This ratio will probably
reverse to two-thirds of families being renters, which is already the
case in Somerville. The Green Line's arrival, and a spatial pattern
that is congenial to expanded public transportation, will also serve
Somerville well.

As Somerville suffered from the flight to the
suburbs, the new economy will bring suffering to suburbs not served by
rail transit. A growing number of residents will leave them, lowering
their property values. Suburban property tax revenues will drop, in
turn, reducing the safety and quality education that made suburbs
attractive. Their low-quality postwar construction will deteriorate
without continuous reinvestment. They will become the new slums,
characterized by poverty, crime, and decay.

So Somerville as a
whole is well positioned to benefit from the coming economic
transformation. The highly educated newcomers who have been arriving
here since the late 1980s will benefit the most. But unless our city's
political leaders change their idiotic development policies, the
current trend in which people who have grown up here can no longer
afford to pay Somerville rents will accelerate. And local
affordable-housing advocates will be as impotent to forestall this
outcome as they are to meet current housing needs.

Already the
densest city in New England, we do not need more housing. Every new
housing unit worsens the city's structural fiscal deficit, since
housing produces only two-thirds the tax revenue of commercial
property, but generates twice the costs to the city.

The best
housing development program is a job that will pay market-rate rents.
As educated workers concentrate, knowledge workers innovate, and new
businesses proliferate, Somerville is positioned to greatly expand its
tax base with office and research-and-development-facility
construction. Some of the tax revenues thus produced could be used to
prepare long-term residents for well-paying jobs in the companies that
will locate here.

We cannot achieve this if we keep frittering
away our prime office locations and infrastructure concentrations on
suburban-style big-box developments and soccer stadiums. And nonprofit
housing developers are not doing their clients or the city any favors
by building pockets of poverty like the developments next to the Target
store and on the St. Polycarp's site. Instead, they should acquire and
renovate solid, already existing housing stock as mixed-income
developments.

Led by a vision that is equal to the new reality,
Somerville after the fall can do very well. Or, we can remain a
close-in bedroom community for knowledge workers and watch history pass
us by.